A big refinery, a large loan, and a bunch of eager banks
Subscribe to enjoy similar stories. Mumbai: India’s top lenders are falling over each other to finance a ₹39,000 crore refinery being set up by Chennai Petroleum Corp. and Indian Oil Corp.
in Tamil Nadu, in one of the largest corporate loan deals in recent times. State-owned banks like State Bank of India (SBI), Bank of Baroda (BoB) and Punjab National Bank (PNB) are among six lenders which have bid for the loan, two bankers aware of the development said. Of the ₹39,000 crore, 70% or about ₹27,000 crore would be debt, and the rest equity.
Established in January 2023, Cauvery Basin Refinery and Petrochemicals Ltd (CBRPL) is planned as a 75:25 joint venture between Indian Oil Corp. Ltd and Chennai Petroleum Corp. The proposed nine million tonnes per annum (mtpa) refinery will come up at Nagapattinam.
The loan's interest rate is likely to be linked to SBI’s three-month marginal cost of funds-based lending rate or MCLR, the two people cited above said on the condition of anonymity. Following a recent revision, SBI’s three-month MCLR now stands at 8.55%. “It will also have a spread over the MCLR rate, but pricing details will be available later," said the first banker cited above.
“There is a lot of demand for public sector projects, and we have seen banks trying to corner as much as possible, given the low risk profile of such projects." Also read | SBI won’t get into a rate war amid fight for deposits, says new chief SBI has bid for the entire loan while others have put in bids for smaller chunks, one of the two bankers said. “This is not similar to projects where SBI has underwritten the whole loan and then downsold it to other lenders. This is a bidding process where allocations would happen later, and many banks have
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